DEXUS eyes expansion in Health Care

DEXUS eyes expansion in Health Care

Dexus Healthcare Property Fund (DHPF), an open-ended unlisted Australian property fund, has attracted A$250m (€158m) in its latest capital raising from existing and new investors for a portfolio that includes assets such as Sydney’s North Shore Health Hub.

Since its inception, the open-ended unlisted fund has raised A$850m from 12 institutional investors and investor groups, including Dexus. DHPF fund manager Jemma Maddick told IPE Real Assets the latest capital raising brought in six new Australian and foreign investors, including pension funds.

Deborah Coakley, executive general manager of funds management at Dexus, said investor appetite for healthcare had ramped up “massively” since the fund was launched in 2017 as part of an asset diversification strategy by Australia’s largest commercial landlord. Healthcare asset sales volumes and prices are hitting record levels as new research show investment by listed real estate investment trusts increased 12-fold in the past 23 months.

“The successful completion of the equity raise diversifies our investor base and creates capacity and support for future growth,” fund manager Jemma Maddick told Australian Financial Review

The capital injection has enabled DHPF to invest in two developments in Brisbane: Spring Hill Medical Centre and Herston Car Park for an initial payment of $31.5 million, at a forecast on completion yield above 5 per cent. These properties are located within separate established health precincts in Brisbane. Since announcing the transaction on 30 June 2021, Spring Hill Medical Centre has been leased to a day hospital operator as anchor tenant, resulting in the property being 65% pre-leased, and Herston Car Park has been 100% leased to Silverstone Developments.

Jemma Maddick told Australian Financial Review that the equity raise demonstrates strong alignment with the objectives of institutional investors looking for exposure to a growing portfolio of unique, large-scale, high-quality healthcare real estate assets in Australia.

The fund has been adding steadily to its portfolio in recent months, including the $138.7 million purchase of two life sciences buildings in Melbourne’s Parkville biomedical precinct and its acquisition of a major Adelaide medical centre in a $446.2 million deal last year.

Maddick said the fund had another project under development and a pipeline of acquisition opportunities that would eventually take the total value of the fund’s assets to about A$1.4bn.

Maddick expected the latest capital raising to be fully deployed by next year when Dexus would again open the fund for new investment.

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